Cabinet Seeks more Tax Increases, Less Spending Cuts

THE HAGUE, 04/06/13 - The government parties are planning to introduce tax increases to get the budget deficit below 3 percent of GDP in 2014. The Christian democrats (CDA) are opposing this move.

If the conservatives (VVD) and Labour (PvdA) have to make extra savings next year, more tax increases will follow than the cabinet is currently carrying out. Premier Mark Rutte has indicated in recent weeks that up to one-third of extra measures may come from increases in the burden of taxes and social premiums and two-thirds from cutting government spending.

But this division is not feasible, NRC Handelsblad reports on the basis of anonymous sources within both government parties. Cutting government spending would take too long to get underway to have a positive effect as early as 2014.

The European Commission stated last week that the Netherlands must bring its budget deficit down to 2.8 percent in 2014. This means that at least an extra 6 billion euros of savings must be found.

The cabinet cannot count on the support of the CDA as far as tax increases are concerned. “This kills the economy,” said party leader Sybrand Buma Saturday at the party’s spring congress in Den Bosch.

Buma expressed sharp criticism of the coalition of VVD and PvdA. This “has no vision, does not inspire and is bloodless.” It continues to be stuck in “the overweening individualistic market thinking of the right and on the other side, the all-encompassing government of the left.”